GoPro cuts staff, considers selling company after weak holiday sales

GPRO stock touched a record low today

GoPro announced Monday it would eliminate its Karma drone business and lay off 20 percent of its workforce.

The camera and technology company said it would cut its workforce of 1,254 to fewer than a thousand as it projected fourth-quarter sales of US$340 million, well below the US$474 million expected by analysts.

Woodman said GoPro's results were impacted by several factors, including consumers' reluctance in November to purchase the company's Hero5 Black camera at the same price it cost when the camera was launched in late 2016. Instead, GoPro said narrow margins and a hostile regulatory market in Europe and the US make the drone market "untenable".

In a particularly surprising move, it also announced that it would be exiting the drone business.

The disappointing outlook sent shares plummeting almost a third to an all-time low of $5.04 in morning trading Monday. Instead, it's been plagued by problems from production delays to a recall of 2,500 units due to a battery issue. Karma has faced margin challenges in and extremely competitive market.

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GoPro hoped its Karma drone would drive growth. The company's fourth-quarter guidance called for revenue of $470 million, down from $541 million in the prior-year period.

He hoped the actions would return the firm to profitability in the second half of 2018.

GoPro issued a sales warning for its fourth quarter results of $340m (£250m) for the three months to end of December - down 37 per cent on what it previously turned over for the same period past year.

GoPro, whose cameras and drones are mostly used by sports fans and travel enthusiasts, also cut the price of its Hero6 cameras to $399 from $499. "GoPro will continue to provide service and support to Karma customers". CEO Nick Woodman, speaking to CNBC, commented on the company's plans: "If there are opportunities for us to unite with a bigger parent company to scale GoPro even bigger, that is something that we would look at".

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